Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us (2009), gave a fascinating presentation at the 2009 TEDGlobal conference, about motivation and the “mismatch between what science knows and what business does.” He suggests that current business environments rely too heavily on extrinsic motivators (such as financial rewards), which can actually result in negative or reverse effects on behavior and performance, rather than focusing on what science tells us, which is that by fostering peoples’ intrinsic motivation (individual needs and desires), they often perform better and are more personally satisfied.
Here are the highlights of his presentation (the video is about 20 minutes):
DUNCKER’S CANDLE PROBLEM
Task: Attach the candle to the wall so that the wax doesn’t drip on the table.
- A candle
- A book of matches
- A box of thumbtacks
Solution:Most people figure out eventually that they can use the box that the tacks came in to act as a platform for the candle.
The Key: To overcome functional fixedness, which Duckner defines as being “a mental block against using an object in a new way that is required to solve a problem” (1945).
In 1962, Sam Glucksberg did this same experiment and told participants he was going to time them. In his experiment, he used two groups:
- Group #1: told they would be timed to establish norms/average times for completion, no incentive
- Group #2: told they would receive money if they were in the top 25% fastest times and additionally would receive even more if they were the fastest
The Results: Those who were given the option of a monetary reward took 3.5 minutes LONGER.
Glucksberg also did another variation of this experiment, in which the incentivized group now outperformed the non-incentivized group. Why? The tacks were presented outside of the box, thus simplifying the task so that there is an obvious solution.
Significance: Pink points out that “If-then rewards work really well for those sorts of tasks, where there is a simple set of rules and a clear destination to go to,” but most of the tasks we face in today’s business world are more like the original candle problem, where we are required to think outside of the box to come up with solutions.
Dan Ariely and three of his colleagues conducted a study with MIT students where they were given tasks to do and offered three levels of monetary rewards for their performance.
- If task only involved mechanical skill, bonuses worked as they would be expected: the higher the pay, the better the performance.
- If a task called for even rudimentary cognitive skill, a larger reward led to poorer performance.
To rule out cultural bias, the team also conducted the same experiment, using the same monetary reward amounts used at MIT, in Madurai, India where the same amounts of money would be worth significantly (e.g. the large reward equaling 2 months’ pay).
- Those offered the medium level of rewards did no better than people offered the small rewards.
- People offered the highest rewards did the worst.
Furthermore, the researchers noted that “In eight of the nine tasks we examined across the three experiments, higher incentives led to worse performance.”
Researchers at LSE looked at 51 students of pay-for-performance plans used at a number of companies and concluded that “We find that financial incentives can result in a negative impact on overall performance.”
THE NEW MOTIVATION MODEL
While money and other extrinsic motivations play a role in motivation and work well for some tasks, if you really want people to perform, you should “take the issue of money off the table” so people can focus on their work. After that, there are three factors that lead to better performance and personal satisfaction:
- Autonomy: the urge to direct our own lives.
- Mastery: the desire to get better and better at something that matters.
- Purpose: the yearning to do what we do in the service of something larger than ourselves.
THE NEW MODEL IN PRACTICE
Atlassian, an Australian-based software company, offers its employees what it has dubbed “FedEx Days.” As described on their website, “FedEx Day is Atlassian’s hack day, a one-day creative burst of brainstorming, prototyping and presenting. It’s not just for developers either: anyone can participate. Product managers, tech writers and marketers have all taken part. Here’s a behind-the-scenes look at how FedEx Day has evolved.”
Google, well-known for being one of the top companies to work for, states on their website that “We offer our engineers “20-percent time” so that they’re free to work on what they’re really passionate about. Google Suggest, AdSense for Content, and Orkut are among the many products of this perk.”
ROWE or Results-Only Work Environment, was created by two American consultants, and is being used at about a dozen companies in the U.S. In his presentation, Pink describes the ROWE model:
- People don’t have schedules – they show up when they want, they don’t have to be in the office at certain time or anytime
- They just have to get their work done; how they do it, when they do it, where they do it is totally up to them
- Meetings in these kinds of environments are optional
Rowe benefits for businesses:
- Productivity goes up
- Worker engagement goes up
- Worker satisfaction goes up
- Turnover goes down
Encarta versus Wikipedia. You’d think Encarta did everything right, they hired the best minds and paid top dollar to get the work done. Yet in 2009, Encarta finally had to concede defeat to Wikipedia, whose content is entirely user-generated, for free!
Pink closes out his presentation with these three statements:
- Those 20th century rewards, those motivators we think are a natural part of business, do work, but only in a surprisingly narrow band of circumstances.
- Those if-then rewards often destroy creativity.
- The secret to high performance isn’t rewards and punishments, but that unseen intrinsic drive – the drive to do things for their own sake. The drive to do things because they matter.
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